Philippine Public Sector Accounting Standards

Philippine Public Sector Accounting Standards 16 INVESTMENT PROPERTY Table of ContentsPAG

Number

BACKGROUND

INTRODUCTION TO THE IPSAS 16

PHILIPPINE APPLICATION GUIDANCE TO IPSAS 16

Scope1

Measurement After Recognition2

Effective Date3

Philippine Public Sector Accounting Standards 16 - INVESTMENT PROPERTY BackgroundThis Philippine Public Sector Accounting Standard (PPSAS) 16 consists of International Public Sector Accounting Standard (IPSAS) 16, Investment Property, and the Philippine Application Guidance (PAG) prepared to suit the Philippine public sector situation.

The IPSAS 16 was issued in December 2001 and revised in December 2006 by the International Public Sector Accounting Standards Board (IPSASB) of the International Federation of Accountants (IFAC). This includes amendments resulting from IPSASs issued up to January 15, 2012. The PAG (in italics) provides supplementary guidance on the proper implementation of IPSAS 16.

Introduction to the IPSAS 16IPSAS 16 prescribes the accounting treatment for investment property and related disclosure requirements. Investment property shall be measured initially at cost except when it is acquired through a non-exchange transaction such as donation, or when it pertains to a property interest held under an operating lease. After initial recognition, the entity shall choose either fair value or cost model and shall apply that valuation policy to all its investment property. At any case, the fair value shall be determined either for measurement (if the entity uses the fair value model) or disclosure (if it uses the cost model). Philippine Application Guidance to IPSAS 16Scope

PAG1. Paragraph 3 deals with the applicability of this Standard to all public sector entities other than Government Business Enterprises (GBEs). GBE is an entity that has all the following characteristics: (a) Is an entity with the power to contract in its own name; (b) Has been assigned the financial and operational authority to carry on a business; (c) Sells goods and services, in the normal course of its business, to other entities at a profit or full cost recovery; (d) Is not reliant on continuing government funding to be a going concern (other than purchases of outputs at arms length); and (e) Is controlled by a public sector entity. This standard shall be applied to all National Government Agencies (NGAs), Local Government Units (LGUs) and Government-Owned and/or Controlled Corporations (GOCCs) not considered as GBEs. Measurement After RecognitionPAG2. Paragraph 39 permits the entity to choose between the fair value model and the cost model as accounting policies applicable to its investment property. For consistency and uniformity, the cost model shall be adopted.Effective Date

PAG3. This PPSAS shall apply for annual financial statements covering periods beginning January 1, 2014.

PPSAS Investment Property

January 2014

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